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How the GSA Failed to Watch Itself

Courtney Rubin

Business Writers

Two U.S. General Services Administration employees were fired and another four were placed on administrative leave after it emerged that the agency lavished $835,000 on an employee event featuring a mind reader, $4-per-shrimp-cocktails, and a commemorative coin set. (Ironically, the $6,325 commemorative coins–presented in velvet boxes–saluted the GSA's work on the stimulus spending backed by President Barack Obama.)

The GSA's responsibilities include managing and renting property for government agencies and obtaining equipment and services. It holds regional conferences for its staff. The acting administrator of Region 9, covering the western U.S., instructed planners to make the 2010 conference in Nevada "over the top," bigger and better than previous events, according to the agency's inspector general, released a report on the spending.

Among the expenses for the October 2010 event: $3,200 for a mind reader, $6,300 for a commemorative coin set display and $75,000 for a training exercise aimed at building a bicycle, the Washington Post said. The four-day event–held at M Resort Spa Casino in Henderson, Nevada, just south of Las Vegas–was attended by 299 employees. It also involved a payment of $8,130 to print "yearbooks" for participants, a clown, and a comedian, according to an investigation released yesterday by the agency's inspector general.

"GSA spending on conference planning was excessive, wasteful and in some cases impermissible," the watchdog office found. "GSA failed to follow contracting regulations in many of the procurements associated with the conference and wasted taxpayers dollars."

No tax dollars were spent on alcohol, according to the event, though the $146,527 food bill included $44-per-person breakfasts and a $30,207.60 cocktail reception and closing dinner. The latter included $4 shrimp, $5 "Mini Monte Cristo sandwiches," and $5 Boursin Scalloped Potato with Barolo Wine Braised Short Ribs. There was a $19-per-person artisanal cheese display and $7,000 of sushi.

In her formal resignation letter submitted to the White House and posted online by The Post, Johnson said the agency "made a significant mis-step."

"Reports of an internal conference in which taxpayer dollars were squandered led me to launch internal reviews, take disciplinary personnel action and institute tough new controls to ensure this incident is not repeated," Johnson wrote. "I feel I must step aside as administrator so that the agency can move forward at this time with a fresh leadership."

Obama was "outraged by the excessive spending, questionable dealings with contractors and disregard for taxpayer dollars," Jacob Lew, the White House chief of staff, said yesterday in a statement.

A GSA event planner asked the M Resort's conference services manager to help arrange the purchase of a $98 purse she "cannot live without," according to Bloomberg, citing the report.

When the M Resort manager offered a $30 "comp," the discount was promptly accepted, the report found.

What is the most you've ever spent on an employee event? What spending guidelines do you offer if your employees plan it?